If I do that and title doesn't transfer for at least another year, does this meet the 2 year rule?

Note I am not an expert on LLCs but I pay for experts to provide us guidance. 

Does anyone have any experience with this that can provide some insight on how to structure a deal? 

Addendum states: - Buyer to provide financing for 70%. $225 X 70% =$157,500.

He will be providing the capital to cover the closing costs and part of the rehab.

There shouldn't be any need to negotiate them as you would negotiate rent, they just are what they are, and the owner is required to provide proof of those costs to you.

Based off the numbers I provided above, how much could I get out?

Can someone provide me with some financing ideas other than the two that I just mentioned that would enable the other heir to receive cash from their portion of the equity based on its current assessed value and allow me to take ownership of the home, subsequently remodel it, and rent it?

Based on the new information provided by the City for what can Qualify; I would say this likely could Qualify for an Express Permit.

I have house hacked 3 times in the Logan Square & bucktown neighborhoods.It will probably easier if you can provide some more details on the analysis....maybe consider BiggerPockets calculator.